China postpones network project

CBS.MarketWatch.com

Thursday's Top Stories

China postpones network project

Compiled by CBS MarketWatch Last Update:

BEIJING (CBS.MW) -- Less than a week after China announced it would deploy a new type of mobile communications relying heavily on U.S. technology, the government has postponed the process indefinitely. The delay order, which hasn't been made public, stunned foreign firms, some of which had already bid on the project that would build a national mobile-phone network. Executives at several multinational companies say their bids to supply equipment aren't being accepted. Some speculate the move is a bargaining tactic as the U.S. Congress prepares to debate whether to support China's entry into the World Trade Organization. "We've been told that our discussions will be delayed," said Michael Ricks, president of Ericsson China Co., a subsidiary of Telefon AB L.M. Ericcson
ericy
the Swedish telecom giant. He said officials from the Chinese operator of the planned network told him the order had come from the government. "There's no commercial reason why that would be, so that leaves political," Ricks said. China's second-biggest phone company, China United Telecommunications Corp., or China Unicom, announced last week that it would build a mobile network using CDMA, or code division multiple access, technology licensed from Qualcomm
QCOM, -0.66%
of the U.S. Many big technology companies had cheered the move, which promised lucrative supply contracts in one of the world's fastest-growing mobile-phone markets. The Wall Street Journal

Daewoo suitors line up

SEOUL (CBS.MW) -- Five of the six companies invited to participate in the bidding for South Korea's insolvent Daewoo Motor have signaled they plan to do so, indicating the competition is heating up. The potential bidders include the top two auto makers in the world, General Motors
GM, -1.82%
and Ford
F, -1.39%
as expected. But it also includes Korea's relatively small Hyundai Motor as well as Germany's powerful DaimlerChrysler AG
dcx
and Italy's struggling Fiat SpA. GM, Ford, Hyundai and Fiat all confirmed that they submitted letters of interest by Monday's deadline. In addition, an individual close to DaimlerChrysler confirmed that the company intends to also submit a letter, although officially the company isn't commenting. A sixth invitee, Germany's Volkswagen AG
"
didn't respond to the invitation, according to an official of one of Daewoo Motor's creditor banks. A VW spokesman in Germany declined to comment. Submitting the letters of interest allows the auto makers to begin studying Daewoo Motor's financial situation and operations. The concern is being sold as part of the breakup of the Daewoo Group. A corporate restructuring committee made up mostly of Daewoo Group executives is handling the sale. A spokesman for Daewoo Motor said the committee would choose in May one or two companies with which to negotiate a sale agreement. Officials on the committee declined to confirm which companies had responded to the invitations to participate, but the official at the major creditor bank said four car companies submitted letters of interest and a fifth asked for extra time to make a decision. A spokesman for Daewoo Motor said invitees could still respond. GM, which opened talks to invest in Daewoo Motor back in 1998, said it would continue to focus on acquiring Daewoo Motor's passenger-car business. "From our standpoint, we hope the process will move quickly," said Rob Leggat, a spokesman for GM in Singapore. "The longer it goes on, the worse it is for the health of Daewoo." The Wall Street Journal

EC postpones Vodafone ruling

BRUSSELS (CBS.MW) -- Vodafone AirTouch
VOD, +0.80%
faces a month's delay in consummating its E175bn takeover of Germany's Mannesmann as the European Commission has asked for additional information. Wednesday's request from the Commission did not focus on any specific issue, but was a demand for data on a broad range of points already discussed between the company and the EU's merger taskforce. The request means that the Commission will stop the clock in its initial one-month probe into the merger. When the company refiles its submission, which could be in the next few days, the Commission will examine it for another 30 days and decide in late March whether to open a full four-month antitrust probe into the deal, or to clear it. The Commission's interest is believed to have shifted from Orange, the UK mobile phone company, to other concerns about the merger's impact on the telecoms market. Vodafone has already offered to demerge Orange, the UK's third largest mobile operator recently bought by Mannesmann, to try to satisfy regulatory concerns about the merger. Officials are understood to be satisfied with the plan to sell Orange, but need to investigate concerns raised by rival telecoms companies and customers about the merger's more general impact. Vodafone's share price rose 4.5p yesterday to 348.5p following a 10 percent rise in the price on Tuesday when Vodafone confirmed it had taken full control of Mannesmann's share capital. Investors are attempting to achieve a full weighting in the group. Financial Times

Wednesday's Top Stories

Gillette may shave off Braun assets

NEW YORK (CBS.MW) -- Gillette
G, +0.45%
continuing a push to shed weak assets, hired investment bank J.P. Morgan to explore strategic alternatives -- including a possible sale -- for a chunk of its struggling Braun division. Gillette said it is reviewing Braun product lines including kitchen devices, some personal-care products such as hair dryers and curlers, thermometers and other health-care instruments. The product lines under consideration for a possible sale accounted for about 35 percent of Braun's sales last year of $1.58 billion. The move comes as Gillette refocuses its business on shaving, oral care and batteries, the company's most profitable product categories. Gillette said it plans to retain Braun's line of Oral-B electric toothbrushes and Braun electric shavers. Gillette recently hired Merrill Lynch to try to sell Gillette's stationery unit, according to people familiar with the plan. Stationery includes Parker, Waterman and Paper Mate pens, along with the Liquid Paper brand of correction fluids. Braun, of Kronberg, Germany, saw sales fall 9 percent and profits skid 47 percent to $154 million in 1999. Gillette acquired Braun in a diversification move in 1967 for $50 million in cash and $18 million in stock. The Wall Street Journal

Infineon IPO details revealed

FRANKFURT (CBS.MW) -- Infineon, the semiconductor division of the German electronics and engineering group Siemens, could be valued at more than E20bn ($19.6bn) when it lists on the Frankfurt and New York stock exchanges next month in one of the largest initial public offerings of a European high-technology company. Siemens is selling up to 29 per cent of Infineon which, based on the indicative price range of E29 to E35 a share disclosed on Monday, values the stake at between E5bn and E6bn. The stock will begin trading on March 13. The Infineon IPO, lead managed by Deutsche Bank and Goldman Sachs, is expected to be the largest in Germany since 1996, when Deutsche Telekom's first market issue was valued at about E10bn. It vies with Deutsche Post for the label of biggest German IPO of the year. Technology analysts expect heavy demand for Infineon shares, in part because the company is enjoying strong sales growth and has returned to profit after a difficult three years in the late 1990s when world semiconductor prices collapsed. Investors have already benefited from Siemens' flotation of Epcos, the manufacturer of electronic components, whose share price has soared to almost E150 from E31 when it was listed last October. Epcos recently replaced Mannesmann, the telecommunications group, in Frankfurt's Dax 30 blue-chip index. Financial Times

Hong Kong consumer prices fall

HONG KONG (CBS.MW) -- Hong Kong's long-running deflationary trend took a turn for the worse in January, as aggressive price discounting ahead of the Lunar New Year holiday led to a larger-than-expected fall in the city's consumer prices. The government said Tuesday that consumer prices fell 5.3 percent in January from a year earlier -- far exceeding economists' forecasts, which estimated a 3.7 percent fall. It also marks the 15th straight month of deflation, which peaked in August when the index fell 6.1 percent. In December, it dropped 4 percent. Economists said the result puts in doubt their previous predictions that deflation would turn into inflation some time this year. Instead of revealing renewed pricing power and continued economic pickup, as expected, the figures suggested a hiccup in the city's fragile recovery. The Wall Street Journal

Tuesday's Top Stories

OPEC producers divided on output increase

NEW YORK (CBS.MW) -- Many of the world's leading oil producers are leaning toward boosting oil output, but members of the Organization of Petroleum Exporting Countries remain divided over critical details, casting doubt over how quickly it can act to lower skyrocketing oil prices and stave off potential gasoline shortages this summer. The Wall Street Journal reported that oil ministers of the Gulf Co-operation Council -- which includes Qatar, Saudi Arabia, Kuwait, the United Arab Emirates and non-OPEC members Oman and Bahrain -- will meet Wednesday in Riyadh, Saudi Arabia, and will likely agree that output should be increased. But differences remain over the amount and the timing, according to a Saudi official. "The question, which isn't settled yet, is by how much and when," he told the Journal. The Wall Street Journal

World oil supply is vulnerable to pressure, IEA chief says

PARIS (CBS.MW) -- Oil inventories have fallen to such low levels that the world market has become vulnerable to a supply shock -- such as a willful interruption of exports by Iraq, said Robert Priddle, executive director of the International Energy Agency. In an interview with The Wall Street Journal Monday, the IEA chief sounded the alarm that oil prices have risen close to levels that could be damaging to both consumers and producers of petroleum, and that members of the Organization of Petroleum Exporting Countries will find it difficult to correct the imbalance they have created by restraining supply. Priddle also expressed the belief that eventually producers will open their taps wider, though he was skeptical about the ability of government cartels to get it right quickly. The Wall Street Journal

British Telecom plans shake-up to court investors

LONDON (CBS.MW) -- British Telecommunications PLC is on the verge of a big restructuring designed to restore investors' confidence in the U.K. operator after a series of damaging reverses. According to the Financial Times, a principal aim will be to convince analysts and brokers that the company should be valued at more than 20 pounds a share on a sum of its parts basis compared with estimates of about 15 pounds and the current price of around 10 pounds per share. It's expected that BT
BTY, +15.71%
will be restructured so the value in its component parts is more immediately visible to the market. Financial Times

Glaxo issues warning over future of R&D

LONDON (CBS.MW) -- Britain must retain its scientific edge if Glaxo SmithKline is to keep its research and development in the country, the company soon to be formed by the merger of Glaxo Wellcome
GLX, +0.00%
and SmithKline Beecham
SBH, +0.00%
has warned the U.K. government, the Financial Times reported. Richard Sykes, chairman of Glaxo and J.P. Garnier, who will head the new company, Monday testified in front of the House of Commons science and technology committee in response to Members of Parliament's worries that a decision to locate corporate headquarters in the U.S. would cripple pharmaceutical research and development in the U.K. Financial Times

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.